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Institutional rules, labour demand and retirement through disability programme participation

Listed author(s):
  • Ossi Korkeamäki
  • Tomi Kyyrä

We use matched employer-employee data from Finland to model transitions out of work into sick leave and disability retirement. To identify the role of institutional factors we exploit reforms that changed medical requirements for disability pension eligibility and experience-rated employer contributions. We find that transitions to sick leave and disability pension benefits are relatively rare in growing establishments, but rather common in establishments with a high degree of excess worker turnover. We also show that transitions to disability retirement depend on the stringency of medical screening and the degree of experience rating applied to the employer.

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Paper provided by Government Institute for Economic Research Finland (VATT) in its series Working Papers with number 16.

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Date of creation: 27 Sep 2010
Handle: RePEc:fer:wpaper:16
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  1. Pekkarinen, Tuomas & Uusitalo, Roope, 2009. "School Tracking and Development of Cognitive Skills," IZA Discussion Papers 4058, Institute for the Study of Labor (IZA).
  2. Rokkanen, Miikka & Uusitalo, Roope, 2010. "Changes in Job Stability: Evidence from Lifetime Job Histories," IZA Discussion Papers 4721, Institute for the Study of Labor (IZA).
  3. Gielen, Anne C. & van Ours, Jan C., 2005. "Age-Specific Cyclical Effects in Job Reallocation and Labor Mobility," IZA Discussion Papers 1670, Institute for the Study of Labor (IZA).
  4. Jarkko Harju, 2009. "Voluntary pension savings: the effects of the finnish tax reform on savers’ behaviour," Working Papers 2009/22, Institut d'Economia de Barcelona (IEB).
  5. Jonathan Gruber, 2000. "Disability Insurance Benefits and Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1162-1183, December.
  6. Michele Campolieti, 2004. "Disability Insurance Benefits and Labor Supply: Some Additional Evidence," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 863-890, October.
  7. Duncan McVicar, 2008. "Why Have Uk Disability Benefit Rolls Grown So Much?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 114-139, 02.
  8. Katariina Nilsson Hakkala & Fredrik Heyman & Fredrik Sjöholm, 2009. "Multinational firms and job tasks," Working Papers 8, Government Institute for Economic Research Finland (VATT).
  9. Hassink, R. & van Ours, J.C. & Ridder, G., 1997. "Dismissal through disability," Other publications TiSEM b756763d-1536-4d61-84e4-9, Tilburg University, School of Economics and Management.
  10. David Autor & Mark Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," NBER Working Papers 12436, National Bureau of Economic Research, Inc.
  11. Pierre Koning, 2009. "Experience Rating and the Inflow into Disability Insurance," De Economist, Springer, vol. 157(3), pages 315-335, September.
  12. Mari Rege & Kjetil Telle & Mark Votruba, 2009. "The Effect of Plant Downsizing on Disability Pension Utilization," Journal of the European Economic Association, MIT Press, vol. 7(4), pages 754-785, 06.
  13. Jaakko Pehkonen & Aki Kangasharju & Sanna-Mari Hynninen, 2009. "Matching inefficiencies, regional disparities and unemployment," Working Papers 4, Government Institute for Economic Research Finland (VATT).
  14. Tomi Kyyrä & Ralf A. Wilke, 2007. "Reduction in the Long-Term Unemployment of the Elderly: A Success Story from Finland," Journal of the European Economic Association, MIT Press, vol. 5(1), pages 154-182, 03.
  15. Seppo Kari & Hanna Karikallio & Jukka Pirttilä, 2009. "The impact of dividend taxation on dividends and investment: New evidence based on a natural experiment," Working Papers 9, Government Institute for Economic Research Finland (VATT).
  16. Ilja Kristian Kavonius, 2010. "Fiscal policies in Europe and the United States during the Great Depression," Working Papers 13, Government Institute for Economic Research Finland (VATT).
  17. Dan Black & Kermit Daniel & Seth Sanders, 2002. "The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust," American Economic Review, American Economic Association, vol. 92(1), pages 27-50, March.
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